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Appeared on: Thursday, January 26, 2012
Nintendo Q3 Profit Slumps, New Wii And Nintendo Network Coming End Of The Year

Nintendo posted a 61 percent drop in quarterly
operating profit on Thursday and forecasted an operating loss for the year to March. The company also confirmed plans to launch Wii U along with Nintendo Network - an online platform similar to that of the Xbox 360 and the PS3 - in time for the year-end shopping season.

The full-year operating loss will be the first since
the company started announcing earnings. The company
blamed yen strength and weaker-than-expected sales.

Nintendo cut its annual forecast for its Wii console
to 10 million devices from 12 million, and for the 3DS
handheld games device to 14 million from 16 million.

Nintendo will launch a successor to its Wii game
console in the U.S. and other key markets in time for
the crucial year-end shopping season later this year,
Nintendo President Satoru Iwata said on Thursday.
The new Wii U would be launched in the United States,
Europe, Australia and Japan.

The company is aiming to complete the development of the entire system and prepare sufficient software so that the Wii U "will be at its best at the time of the launch. " Nintando has learned a bitter lesson from the launch of the Nintendo 3DS. Poor sales forced the company to slash the price of its much-anticipated 3DS handheld games device in August, only six months after its launch.

The Wii U is known for its new controller with a screen, among other features. For this controller, Nintento has decided to install a NFC function. NFC is the acronym for Near Field Communication, which is a set of standards to establish radio communication in close proximity. Nintendo' s NFC is the noncontact NFC standard that is compatible with FeliCa and MIFARE, and is expected to be widely used around the world in the near future. By installing this functionality, it will become possible to create cards and figurines that can electronically read and write data via noncontact NFC and to expand the new play format in the video game world. Adoption of this functionality will enable various other possibilities such as using it as a means of making micropayments.

Iwata also talked about the s new network service from Nintendo. The company's "Mario Kart 7" that launched late last year features an online competition mode includes the system called "Communities." Each player can create his or her own online "Community" and decide the rules and conditions of the races to be conducted there, and anyone who enters the designated "Community number," can join to enjoy the matches there. With that system, the company is offering a new kind of network service, which is different from the network services Nintendo has been offering under the name of Nintendo Wi-Fi Connection.

For "Mario Kart 7," Nintendo has already started using the name "Nintendo Network service" . The Nintendo Network service is the company's new network platform which will cover the Nintendo 3DS and the Wii U.

Unlike Nintendo Wi-Fi Connection, which has been focused upon specific functionalities and concepts, Nintendo is aiming to establish a platform where various services available through the network for its consumers shall be connected via Nintendo Network service so that the company can make comprehensive proposals to consumers. For example, competitions and communication among users, as well as the sales of digital content, will be covered within the Nintendo Network.

For the Nintendo 3DS and the Wii U, Nintendo will push forward to make the software compatible with Nintendo Network.

As for the sales of downloadable add-on content, "Tobidasu Pricla Kiradeco Revolution" (Japanese title), which Nintendo has already started the download sales to the owners of the Nintendo 3DS, is the first title for which consumers can purchase and download add-on content. Nintendo plans to make available the downloadable add-on content for this Nintendo first-party digital download title in the near future. As for the download sales of add-on content for packaged software, it is expected that "THEATRHYTHM FINAL FANTASY," which is scheduled to be launched on February 16 by Square Enix Co., Ltd. is going to be the first software title for which applicable music will be sold by Square Enix as downloadable add-on content.

Iwata addded that Nintendo, as a software maker, does not plan to deploy businesses where its consumers cannot know in advance which item will appear as the result of their payment and they have to repeat the payments and, before they know it, they end up spending a huge amount of money in order to obtain the items they originally wanted to purchase.

"As a software maker, Nintendo believes that its packaged software should be sold to our consumers in a form so that the consumers will know in advance that they can enjoy playing the software they purchased just as it is. We believe that our consumers will be able to feel more secure if we offer our add-on content as an additional structure in which those who love the game will be able to enjoy it in a deeper way for a prolonged play time," Iwata added.

For the digital sales of the content, Nintendo is also considering the future possibility of digital distribution of packaged software, which is often referred to as "software download sales." This concept was built into the design of the Nintendo 3DS, and Nintendo already has the necessary infrastructure.

"We will prepare the same infrastructure for the Wii U," Iwata said. "However, we have not decided the concrete timing of when we will start it. The decision must be made by taking into consideration such factors as the relationship with the wholesalers and retailers, and the best way to be embraced by consumers, as well as the environment surrounding the market and consumers, such as the required memory capacity on consumers' SD memory cards," he added.

Also for the Wii U, Nintendo is planning to introduce a personal account system compatible with Nintendo Network. With this, for example, the ease of using a video game system when the hardware is shared by multiple family members, which has been a challenge we needed to tackle, shall be improved, and Nintendo will also be able to construct and offer the system by combining a variety of different services and content.